Salford Council demands action on planning obligations

Salford's Labour council has written to Tory minister Greg Clark demanding action on planning obligations - monies which should be invested in affordable homes and other benefits.

The council says that developers aren't coming up with the cash because Government planning policy allows them to make a 17% profit before they become eligible.

And Salford Tories - who have consistently backed Government policy - have completed a massive U-turn by signing up to Labour's letter.

Dear Secretary of State

We are writing to you on a cross-party basis to express our concern about the implications of the National Planning Policy Framework’s statements on viability and planning obligations.
In our city, we are seeing planning application after planning application submitted for residential development but, after applying the NPPF guidance, they are judged ineligible for planning obligations because of the viability test.

We feel that this is wrong in principle because it denies the city much-needed affordable homes and also denies the community much-needed investment in creating good places.
Planning obligations can only be secured where they are necessary to make a development acceptable in planning terms. Any policy that removes the requirement for developers to make contributions means that, by definition, permissions are granted for development which is unacceptable in planning terms.

We accept that in some cases, some development is better than no development at all and only a profit will give developers the incentive to deliver. But the viability assessment calculates that developers should make a minimum of about 17% profit before the requirement for planning obligations is in force.

We regard this as problematic and unhelpful and believe it has resulted in an increase of privately rented schemes at a deflated profit. We view this as counterproductive to the Government’s aspiration to increase home ownership.

We know Salford is not alone in experiencing this problem, as the recent TCPA/APSE report ‘Housing the Nation: Ensuring councils can deliver more and better homes’ demonstrates.The NPPF policy was aimed at securing an increase in the number of housing completions. We support that objective and in Salford we have given permissions for around 13,000 new homes (most of which have not been implemented). The planning system has delivered the permissions.

Our concern is that the focus on numbers should not be at the expense of creating good places to live. Planning obligations deliver the essential physical and social infrastructure needed to create good places. They should not be seen as a burden on development but as essential to development.

We would, therefore, ask you to review the current policy. We accept that this might require a wider review since developer profits are also affected by investment capital and land values. What we are sure about is that this is not a matter of ‘local choice’ when the choice is so constrained by Government policy.